Millennial refinances jump — especially on conventional loans

September 10, 2019 - 2 min read

Millennials move to refinance

Low mortgage rates are pushing more and more Millennials to refinance. Overall refinances jumped 9 percent for Millennials in the last month. They rose even more on conventional loans.

Verify your new rate

Tracking Millennial refinances

According to the latest Millennial Tracker from mortgage technology provider Ellie Mae, refinances accounted for 23 percent of all Millennial mortgage originations in July. That’s a 9 percent increase for the month.

Millennials are stressed about homeownership; here’s how to ease those worries

If you look at just conventional loans, Millennial refinances jumped 10 percent, accounting for 27 percent of all closed loans for the month. VA refinances increased 7 percent, while FHA refinances increased 2 percent.

As Joe Tyrrell, chief operating officer at Ellie Mae, explains, “We’ve seen interest rates for Millennials drop consistently throughout 2019, but from April through June, the refinance market was essentially flat. In the months leading up to July, consumers believed that rates would continue to decrease, and they were correct. Now, millennials are reaping the rewards and locking in historically low rates.”

The top cities for Millennials: Where Generation Y is putting down roots

Shying away from FHA

Another trend to note is the recent Millennial preference for conventional loans. In July, the share of Millennial conventional loans increased 2 percent, while the share of Millennials using FHA loans actually decreased the same amount.

Considering the average FICO score for a Millennial borrower is 728, it comes as no surprise.

Still, as Tyrrell says, “Lenders need to do a better job of educating potential homebuyers on various loan types, especially with rates as low as they are,” Tyrrell said. “FHA loans, for example, have more flexible credit requirements and require smaller down payments, which should be perfect for cash-strapped Millennials.”

Verify your new rate

Get today’s mortgage rates

Are you a Millennial looking to refinance? Then shop around and see what mortgage rates you qualify for today.

Time to make a move? Let us find the right mortgage for you

Aly J. Yale
Authored By: Aly J. Yale
The Mortgage Reports contributor
Aly J. Yale is a mortgage and real estate writer based in Houston who has contributed to Forbes and worked for organizations such as The Dallas Morning News, PBS, NBC, and Radio Disney.